Topical items and views on the impact of digitisation on publishing and its content and the issues that make the news. This blog follows the report 'Brave New World',
(http://www.ewidgetsonline.com/vcil/bravenewworld.html ), published by the Booksellers Association of the UK and Ireland and authored by Martyn Daniels. The views and comments expressed are those of the author.

Saturday, March 21, 2015

EU Approach to eBooks Is Nonsense

This week four cultural ministers from four powerhouses;
Italy, Poland, France and Germany jointly requested that the EU Commission
should think again about the rate of tax for ebooks. This comes only weeks
after the EU High Court ruled against France and Luxemburg and stated that
ebooks are different from physical books. They want the same rate applied as
physical books so countries such as the UK would have zero tax on both, as
opposed to zero on physical and 20% on digital.

We all recognise that Western Europe is a block of
democratic free trading nations with significant economic and political clout.
The challenge is often getting that balance between local national interest and
collective European interest. If it veers too far to one side it becomes unable
to change and what change takes place is often slow and bureaucratic. If it
moves too far to the other side it loses its core strength of collective responsibility
and benefit.

Taxation is a classic battleground where individual
countries raise their own taxes and spend them locally contributing a hefty sum
to the Union based on their often perceived ability to pay. So we have as many
different rates of tax as there are countries and as many ways of allocating
these as there are politicians and ideology. So what has this to do with
Digital Media and technology?

Anyone looking at the different tax rates across Europe
would think that someone has made trade less attractive not more attractive.
Anyone looking at the tax difference between the digital and physical book would
think that someone must have made a mistake and just forgotten to correct it.

One of the greatest challenges the European media industry
faces is getting the unelected commission and courts to realise that the world
has gone digital and that in doing so has created new opportunities not
threats. This taxation rule is a daft as the current lack of real action to
address the tax avoidance plays being made by multinationals. It is matched by
the lack of a rights and IP database. The inability to resell digital goods
because….

The balance between common sense and nonsense, micro control
and macro control, controlled migration and mass migration are challenges the
EU must rise to but repetitively fail to address.

But it would be good if we could just have the simple
understanding that a book is a book is a book. The price may vary from one form
to another but the way the governments view it and the tax they levy against it
should be consistent across all formats.

1 comment:

The EU was supposed to make trade across borders easier. The VATs on ebooks make it a mess. The VATs on them vary from 3% to 25% and because those taxes are taken out of the retail price (rather than added on afterward) it means the retail price has to vary between countries if an author and publisher are going to get anything close to the same return on each sale.

Making matters worse, companies such as Amazon and Apple typically impose pricing only in x.99 increments. That it impossible to match prices to VAT closer than a full Euro, current just over a dollar.

The book versus ebooks conundrum isn't even as ridiculous at that for audiobooks. Audiobooks often get the lower book rate if shipped on physical media (cassette or CD) but the higher ebook rate if sent over the Internet. Since what's being purchases is the same digital file, that makes even less sense.

Hopefully, in the next year or two the EU will straighten this mess out.

About Me

Before entering publishing I worked for many years as a Senior Executive in blue chip organisations in the retail, oil and automotive sectors. My publishing induction was initially as Director of Strategic Development at VISTA. There I was responsible for, and a contributor to, their highly acclaimed ‘Publishing in the 21st Century’ research series, the primary creator behind publishing services PubEasy and ‘batch.co.uk’, the initiator of the development of new Front Office systems to support publishers. In 2006 I joined Value Chain International(VCIL) initially as VP Marketing, Media and Publishing before becoming their President in 2009. In July 2011 the company's operations were acquired by Syncordia. I hold two non executive positions with publishing industry players Bibliophile Ltd and Haven Group and currently setting up Read Petite a service focused on providing digital short form material online via subscription.
Email mdaniels@opus57.co.uk